A cloudy start for business promises a bright future

This is the year of the cloud. It is the technology everybody is talking about. Every firm wants to use it. Consumers are waking up to the way the cloud is changing their lives. The cloud attracts a thesaurus of hyperbole – it is transformative, revolutionary, irresistible.

The cloud deserves every syllable of praise and really is as important as its evangelists keep saying. But before we go any further, perhaps we should clear something up. What is the cloud?

In a nutshell, the cloud is remote access computing. Instead of having all the hardware and software sitting in the same building as you, the stuff you are using sits far away.

There are three types of cloud. The first is software. Gmail or Facebook are commonly used software applications which are hosted remotely in the cloud. Users access the services via a web browser. This is known as SaaS or software as a service. Consumers love the software hosted in the cloud as it frees them from the boring job of installing and maintaining the applications. The last thing a teenage girl wants to do is spend half an hour “upgrading” Facebook to version 6.0. The cloud means they don’t have to. And because these services are hosted remotely they can be accessed from any computer or phone. Most convenient.

This second type of cloud is a little more complex. Software developers need to access development environments which make their jobs a whole lot easier. The cloud offers these environments as and when the need them. This is the platform version of the cloud, also known as platform as a service or PaaS. The weight-loss iPhone app Lose it! was developed using PaaS. The engineers use a cloud service supplied by CloudBees to speed up development. The app’s creator, Charles Teague, says: “We have lower infrastructure maintenance costs and higher productivity because we have access to the computing resources we need, when we need them.”

The cloud offers fast-growing firms the ability to expand seamlessly

Cloud variation number three is infrastructure. Before the cloud, firms needed to store all their data on their own servers. If demand rose unexpectedly those servers would be overwhelmed. If demand was low, the servers would sit idle, wasting money. By using third-party data centres sitting in the cloud, firms can access capacity on demand. This is infrastructure as a service or IaaS.

So, those are the three flavours of cloud. And the breathless overexcitement? It starts when you realise that with the cloud the user does not have to buy or install anything. This removes up-front capital expenditure and any ongoing investment costs.

Furthermore, the cloud host will be a specialist, offering economies of scale. So cloud services have huge inherent cost-saving potential.

There’s flexibility. You rent what you need as you need it. When Cancer Research UK ran a “Stand up to cancer” campaign with Channel 4 in October, it anticipated a huge spike in donations. So it set up a website with payment processing on servers provided by FireHost. During the live TV show, the site received 16,000 credit card payments and 14,000 in four-and-a-half hours subsequently. There was no way Cancer Research UK could have built and run the necessary infrastructure on its own premises. The cloud was the only way.

There’s functionality. Cloud providers don’t rely on users to upgrade, so they can quietly introduce all sorts of snazzy new features. PizzaExpress uses human resources and forecasting services on the cloud, supplied by Fourth, precisely for its adaptability.

PizzaExpress finance director Jackie Freeman says: “Research showed that more accurate sales forecasting with systemised allocation of staff would give us a more productive workforce, increasing our competitive advantage and decreasing staff cost per customer. We needed to produce extra functionality to enable three sets of data to be added to the system each week. This would produce for each site a centralised forecast of likely number of diners, enabling restaurant managers to schedule the optimum numbers of employees.

“Fourth worked tirelessly to ensure their system was adapted for us, enabling us to achieve optimum labour productivity. Without this the task would have required an army of PizzaExpress employees and hundreds of weekly spreadsheets. It has helped us to move fast and start seeing positive results early.”

Ask a cloud computing expert and they’ll rattle off a dozen other reasons to get excited about the cloud. Some may seem arcane, such as the ability to store data in different geographical jurisdictions to comply with national data protection laws.

Others are downright obvious. The cloud offers fast-growing firms the ability to expand seamlessly; just buy a few more user licences of a cloud service and staff can be up and running in minutes.

It isn’t all mindless cheerleading. The cloud presents a number of challenges. There are security challenges and a handful of issues surrounding adoption of the cloud which must be addressed. But, like the internet, the cloud is going to be a part of commercial life from now on. There’s no escaping it.